Which One of the Following Statements Is TRUE

question 31

Multiple Choice

Which one of the following statements is TRUE?

• A) Lenders will protect themselves from asset switching by charging a higher interest rate.
• B) Creditors have a claim on a firm's earning stream through the dividend payments they receive.
• C) An example of asset switching is an option to exchange one piece of real estate for another.
• D) Lenders can't legally prevent a firm from engaging in asset switching.
• E) Firms borrowing money have greater flexibility to use that money when there are debt covenants.

---

Definitions:

Environmental Factors

External elements, including economic, political, social, and ecological factors, that can affect an organization's operations and outcomes.

Individual Factors

Refers to the personal attributes or characteristics that influence a person's behavior and decisions in various situations.

Proactive Behaviours

Actions initiated by an individual to effect change, anticipate outcomes, and engage in future-oriented task management.

Socialization Tactics

Refers to methods used by organizations to integrate new employees into their culture and workflows.